Gold price drop in Dubai amid fresh hostilities in Middle East

In the UAE, gold prices also fell on Wednesday morning again with 22K gold tumbling back under the Dh500-per-gram mark. The downturn is taking place against a backdrop of climbing oil prices and renewed fighting in the Middle East.

The price of 24K gold dropped to Dh538.5 per gram at the market open, down from Dh542.5 per gram at Tuesday's close, marking a decline of Dh4 per gram.

Latest Gold Rates in UAE

Other gold variants also recorded losses:

24K: Dh538.5 per gram
22K: Dh498.5 per gram
21K: Dh478.0 per gram
18K: Dh409.75 per gram
14K: Dh319.5 per gram

Global Gold and Silver Prices

In international markets:

Spot gold traded at $4,468 per ounce, down around 0.5%.
Silver fell 0.7% to $74.77 per ounce.

Gold Records Third Consecutive Monthly Decline

After declining for two consecutive months in March and April, Gold continued its downward trend also in May but at a slower speed. Analysts cited a switch in investor focus away from geopolitical uncertainty to the more immediate economic fallout of the conflict in the Middle East.

These concerns include:

Rising global energy prices
Inflation pressures
Strength of the US dollar
Interest rate expectations
Why Gold Is Facing Pressure

Gold has traditionally underperformed when the dollar weakens and real yields hover just above 0, especially amid ongoing economic or financial uncertainty.

But instead, the data have had the opposite effect. Inflation fears ground in high energy prices and supporting bond yields also helped push the dollar higher. That has lowered the market's hopes for interest rate reductions and thus put some pressure on gold prices.

Expert View

Gold has struggled above the 2000 mark since hitting a record high close of $5,600 per oz in late January, commented Ole Hansen, Head Commodity Strategy at Saxo Bank.

Hansen said May saw gold erase monthly losses for three months on the trot but settle down less than 2%, as investors' attention shifted from the immediate conflict in the Middle East to its ramifications more broadly on energy markets, inflation, US dollars and interest rates.

Gold prices are down in Dubai! Check the latest 22K and 24K rates amid rising Middle East tensions. To get the latest news subscribe to Just Dubai!